Mining for more : the ripple effects of Indonesia's mineral ore export ban

Abstract

Indonesia went through a number of historical landmarks in 2014, one of it being the mineral exports ban. As any other protectionist policies, the ban exposed fundamental defects in Indonesia’s economic structures that made it tough for any entity to work with the ban, resulting in unlikely winners and losers. For instance, Indonesia’s banks are tied with high interest rates and the nation’s only utility provider is ill-prepared to supply energy. While the law was designed to keep Indonesian resources at home, it also resulted in the country needing more resources from foreigners in the form of expertise, capital, and machinery. It indeed exemplifies the problems of an import-substitution economy. The ban would go on to encapsulate Indonesia’s protectionist direction after 10 years of a relatively liberal economy. The project thus sought to provide more extensive coverage of the ban. It aimed at identifying the unlikely winners and losers of the ban and exposing the fundamental defects of the economy one year after the ban was implemented.